RINGING THE LONG TERM RATE BELL!

Is this what happened yesterday when the auction of 30 year bonds did not go well at all. In fact it could be considered in my view a failed auction and since then we've seen long rates spike rapidly higher and this morning we cracked above 4%. As of this post we are at 3.99% The reason this is important is that perhaps, for the first time, the market is beginning to signal that inflationary expectations are becoming an issue to market participants. It is also important for MLPS at least in the short term in that the recent rally leg that began about 50 mlp points ago came with this decline in yield that began from last April when the 30 year was at 4.80%.
Granted rates are not the only factor that took us from roughly 275 to 350. But with long term rates perhaps at the onset of some sort of short term rally, one must consider whether a headwind for mlps has arrived that will, at the very least, send us back to the moving average uptrend lines. On the otherside of this is the fact that MLPS being interest sensitive would probably cause the group to start moving down months before long term rates start rising in a serious way (back to say 5% on the 30 year). Todays trading in mlps will offer us an interesting clue.

No corporate developements this morning and no upgrades or downgrades. The dollar is falling against the Euro. Energy was lower this morning. Stock futures are higher this morning.